This is the Cato Daily Podcast for Monday, June 29th, 2015.

I'm Caleb Brown. Unsustainable debts have left Greece teetering on the brink of collapse with no clear path to avoid a great deal more pain for Greeks and the broader Eurozone.

Greek banks remain closed.

The Greek government is imposed capital controls.

George Selgin is the director of the Cato Institute Center for Monetary and Financial Alternatives.

We spoke about Greece today.

Many years ago as the Eurozone was coming together, I'm willing to be proven wrong on this,

I believe it was Bill Niscanin who said

about that time he figured the euro would last about 10 years and we're beyond that but not that far beyond that. So what were the

what were people saying as the Eurozone was coming together that we're seeing now?

Well, it was understood both by critics of the plan

and by those behind it, the chief architects, that having a Euro zone posed some real dangers.

The crucial one in this case was the danger that some of the

member economies, member governments, would take advantage of the euro to run a very high deficits and would do that because of course

when you're part of a common currency zone, if you can get the deficits monetized by, in this case, the

European Central Bank, then it's like having the rest of the zone contribute to monetizing your

deficits so you have a serious free rider problem.

A good analogy is with Argentina.

You have a kind of federalism there that has contributed to the inflation problems Argentina has had.

Brazil also has this, where the different federal states can run deficits with the hope

and indeed the expectation that the National Central Bank will

end up having to help cover them.

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